One of the government-sponsored enterprises, Federal Home Loan Mortgage Corp. or Freddie Mac has decided to suspend government foreclosures to show its support for President Barack Obama’s foreclosure prevention program, Home Affordable.
The government foreclosures suspension covers defaulting loans that are eligible for any housing initiative of the government.
The current government foreclosures suspension is the second wave after the first program expired on March 6, 2009.
Once again, Freddie Mac told its loan servicers and counselors to find a way to help distressed borrowers to save their homes from government foreclosures.
There are several housing initiatives that have the potential to prevent government foreclosures. They include the refinancing schemes of Freddie Mac, Streamlined Modification Program of the Federal Housing Finance Agency, HOPE NOW Alliance foreclosure prevention plan and refinancing schemes of Federal National Mortgage Association, another government-sponsored enterprise.
According to Freddie Mac’s default asset management officer Ingrid Beckles, the company has told its loan counselors and servicers not to push through with government foreclosures if they were able to establish contact with distressed homeowners.
However, government foreclosures can be implemented if the distressed homeowners, after having been contacted by Freddie Mac representatives, refused to cooperate, failed to show any interest to save their properties or lacked the financial capability to qualify for any refinancing or loan modification schemes.
Meanwhile, the company has also announced a loan modification scheme that targets homeowners who have high risk loans. Under the program, Freddie Mac will hire additional servicers who will focus on troubled homeowners who took out alternative loans and other risky mortgages.
Additionally, Freddie Mac made available highly-trained counselors and loan servicers to assist homeowners who are on the brink of foreclosures and to manage the anticipated increase in the number of callers who will ask for assistance.
On the other hand, HOPE NOW executive director Faith Schwartz said that the agency has successfully modified 123,000 loans in January of this year. The figures represented a 4 percent increase from modification and repayment plans of December 2008.
Also, the alliance of investors, nonprofits and mortgage servicers processed an estimated 125,000 mortgage payment schemes last January.
Meanwhile, RealtyTrac data showed that bank and government foreclosures surged further in February despite implementation of several foreclosure prevention programs.
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosure news at EForeclosureMagazine.com.
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